The United States is quietly starting to convert some of its military nuclear stockpiles left over from the Cold War into fuel for civilian nuclear reactors.
With little fanfare, the process began June 6 at a plant in Piketon, Ohio, run by U.S. Enrichment Corp., a government-owned company based in Bethesda, Md.
The company is turning 13.2 tons of highly enriched uranium into reactor fuel.
The amount is a tiny fraction of the nuclear stockpile. But the conversion, begun by the Clinton administration, is meant to encourage other countries, particularly Russia, to engage in similar kinds of disarmament.
"This reduction," Energy Secretary Hazel R. O'Leary said, "serves as an example to other nations throughout the world which have also agreed to recycle weapons materials for peaceful purposes."
Snags recently developed in a landmark agreement in which the United States is to pay Russia $12 billion for 500 metric tons of its bomb-grade uranium, prompting Congress and the Clinton administration to seek ways to save the accord.
Although the amount of materiel earmarked for conversion is small, it is expected to be increased, eventually involving perhaps billions of dollars in revenue for the Treasury.
The high stakes are prompting battles as private companies argue that open competition would increase federal profits.
"The sale of this material through competitive bidding will maximize the return to the U.S. Treasury," Nicholas M. Nikazmerad, president of Nukem Inc., a nuclear supplier based in Stamford, Conn., told the Senate Energy Committee in written testimony last week.
The nation's atomic stockpile is composed of plutonium-239, which is made in reactors, and uranium-235, which is extracted from natural uranium ore. Plutonium is hard to convert for civilian use while uranium is easily changed into reactor fuel.
Existing treaties do not specify what each party should do with the thousands of nuclear warheads removed from jets, missiles and submarines. In the United States, some warheads have been stored and some have been taken apart by the Energy Department, which originally made them.
Gregory P. Rudy, director of fissile materiel disposition at the Energy Department, said that the end of the Cold War had given the agency a "surplus of material left over from the disassembly of weapons."
Last year the Energy Department disclosed that during the Cold War the nation produced 994 metric tons of highly enriched uranium for bombs, naval reactors and other uses.
The 13.2 tons undergoing conversion in Piketon was originally destined for Navy submarine reactors and were enriched in uranium-235 in a range from 20 percent to 98 percent.
Dilution of that amount into civilian reactor fuel, which has an enrichment of about 4 percent, is expected to take three years.
"We are proud to participate in this historic process," said William H. Timbers Jr., president of U.S. Enrichment.
In addition to that conversion, the Clinton administration in early March pledged to reduce the government's stores of highly enriched uranium and plutonium by 200 tons, enough for thousands of nuclear arms. Fifty tons of uranium in that total is scheduled for transfer to U.S. Enrichment for conversion into reactor fuel.
Energy Department officials say studies are under way that may result in even more of the highly enriched uranium being sent into the civilian market.
If that occurs, bidding for the materiel might be open.
Although the portion of the 200 tons that consists of uranium is a federal secret, private experts estimate it at 160 tons.
Of the 50 metric tons slated for conversion by U.S. Enrichment, five tons is 70 percent enriched in uranium-235 and has an estimated market value of $86 million. The remaining 45 tons is 37.5 percent enriched and has a market value of $412 million. Neither of these estimates include dilution costs, which might total $100 million.
The 50 tons is to be given to the company, which is expected to increase the company's value and increase the profit to the Treasury when the company is sold next year. But competitors such as Nukem argue that open bidding for that materiel would give a better return to the government and create a healthier uranium market.